Lal Pari vs Janki Rai and Others

Fazl Ali, J.—This is an appeal from an order passed by the Subordinate Judge of Monghyr in an execution proceeding. The decree sought to be executed is a mortgage decree which was obtained by the respondent decree-holders against a number of persons including the appellant who is the purchaser of one out of four properties which are the subject-matter of the decree. The property in which the appellant is interested is the second property in a schedule which forms part of the decree and the decree provides that this property shall be sold last of all. The objection which was preferred by the appellant to the decree-holders'' application for execution was firstly that her property should not be sold along with other mortgaged properties, secondly, that no sale should be held unless all the properties were properly valued and thirdly that she should be allowed to pay by instalments such part of the decree as remains unsatisfied after the sale of the other three properties.

The learned Subordinate Judge in disposing of her objection has expressed the view that the Money-lenders Act has no application to the present case. The learned Judge has stated that the Moneylenders Act has been passed to give relief to the debtors and not to persons who with their eyes open purchase the property subject to a mortgage charge. In other words, the learned Judge was of the view that the Money-lenders Act had no application to the case merely because the appellant was a person other than the mortgagor and because she had purchased the property after the mortgage with notice thereof.

In my opinion this view is erroneous. The Money-lenders Act 7 of 1939 describes it as an Act "to provide for the regulation of money-lending transactions in the province of Bihar." This Act repeals the greater part of the Money-lenders Act of 1938 (Bihar Act 3 of 1938). The Preamble of that Act stated that the Act was passed, because it was expedient to regulate money-lending transactions and to grant relief to debtors in the province of Bihar. Neither of these Acts defines a debtor but in Section 2 of the present Act it is stated that the judgment-debtor includes a certificate debtor under the Bihar and Orissa Public Demands Recovery Act of 1914.

This shows that the expression "debtor" has been used in a wide sense so as to include a judgment-debtor. The real question which we have to consider in this case is whether Sections 11, 13 and 14 of the Money-lenders Act, which the learned Subordinate Judge was asked to apply to the present case, have any application or not. Section 11 empowers the Court to direct payment of the amount due in respect of a loan or a mortgage by instalment. Section 13 enjoins the executing Court to estimate the value of the judgment-debtor''s property after hearing the parties and of that portion of such property the proceeds of the sale of which it considers will be sufficient to satisfy the decree. Section 14 provides among other things that the sale proclamation shall include only so much of the property of the judgment-debtor the proceeds of the sale of which the Court considers will be sufficient to satisfy the decree.

On a reference to Section 11 it will appear that the person who is to apply to the Court for fixing instalment is "the judgment, debtor" and on his application the Court may after notice to the decree-holder direct that the amount of the decree shall be paid in such number of instalments and subject to such conditions and on such date as it considers fit. On a plain reading of the section it would appear that this section was enacted for the benefit of all judgment. I debtors and in my opinion the benefit conferred by this section cannot be confined only to a mortgagor and denied to a purchaser of the equity of redemption. If the purchaser of the equity of redemption was impleaded in a mortgage suit and a decree was passed against him, he is a judgment-debtor and is as such entitled to the protection afforded by this section.

It is also to be noticed that this section provides that the Court may fix instalment for the payment of the decree notwithstanding any contract between the "money-lender and the person to whom the loan was advanced."

It seems to me that if the benefit of the section was intended to be confined only to the mortgagor, the expression "the person to whom the loan was advanced" or some such similar expression, must have been used in the latter part of the section also.

But as I have already stated the section clearly states that an order of instalment may be passed on the application of the judgment-debtor and not merely of the person to whom the loan was advanced. Section 13, Money-lenders Act, runs thus;

When an application is made before or after the commencement of this Act for the execution of decree passed in respect of a loan or interest on a loan by the sale of the judgment-debtor''s property, the Court executing the decree shall, notwithstanding anything to the contrary contained in any other law or in anything having the force of law, hear the parties to the decree and estimate the value of such property and of that portion of such property the proceeds of the sale of which it considers will be sufficient to satisfy the decree.

This section clearly provides that before selling the judgment-debtor''s property, the Court shall hear the parties to the decree and estimate its value.

In the present case one of the properties which the executing Court was called upon the sell was the appellant''s property. As the appellant was one of the judgment-debtors it is manifest-that u/s 13 he was entitled to ask the Court to estimate the value of the property after hearing him as well as the decree-holder. Section 14 of the Act is entirely dependent on Section 13 and need not be discussed. The learned Subordinate Judge has discussed the evidence offered on behalf of the appellant in order to show that the value of the mortgaged property stated by the decree-holder is not unreasonable, but as he has proceeded to deal with the question on the footing that the Money-lenders Act has no-application, it is clear that he has approached the case from a wrong point of view.

u/s 13, Money-lenders Act, it is the duty of the Court to hear the parties and estimate-the value of the properties to be sold under the decree. As however the learned Subordinate Judge was dealing with the case apart from the Money-lenders Act, there was no obligation upon him to fix the value of the properties. Under Order 21, Rule 66, Civil P.C., as it stands now, the Court has only to insert the valuation given by the decree-bolder and the judgment-debtor respectively in the sale proclamation and it has to state that it does not vouch for the accuracy of either.

From the judgment of the learned Subordinate Judge it will appear that he was of the view that the present ease was governed by Order 21, Rule 66 and not by the Money-Lenders Act. The learned Subordi nate Judge therefore could not be expected to deal with the question of value with the same care as he would have done, if he had realized that the case was governed by the Money-Lenders Act. The findings of the learned Subordinate Judge have therefore, in my opinion, to be scrutinized with particular care.

In the present case the property in which the appellant is interested was purchased by her for a sum of Rs. 2950 in June 1930. The property in question is a house in Begusarai. The decree-holders valued it at Rs. 1000 only and the learned Subordinate Judge has expressed the view that this valuation is quite fair. The learned Subordinate Judge supports the valuation of the decree, holders by pointing out that "the tiled chhapar from the second storey has now been taken down." It appears to me, however, that the mere fact that the tiled chhapar has been taken down cannot affect the value of the house to a very large extent. Again items 3 and 4 of the mortgaged properties consist of 2 1/2 bighas of land which are situated by the side of a Local Board road.

These lands have been valued by the decree-holders at Rs. 600 only. The appellant examined several witnesses before the learned Subordinate Judge to show that the lands being situated by the side of a road in the town of Begusarai was regarded as valuable and that the price of these lands according to the witnesses examined by the appellant was Rs. 200 a cattah. The witnesses stated that a number of persons are building their houses near about the place where these lands are situated and several tebalas were tendered in evidence to support the statement made on behalf of the appellant as to the value of these lands.

On the other hand one of the decree-holders examined himself in the case and stated that the total value of these lands was Rs. 600 only.

The learned Subordinate Judge has explained away the kebalas on the ground that they relate to lands which had been purchased for residential purposes, whereas one portion of the land which was mortgaged is used for growing maize and another portion is an orchard. He has also stated that the lands purchased under the kebala are at sufficiently long distance from the lands which are the subject of the mort. gage.

Here again, the learned Subordinate Judge seems to have been at pains to demonstrate that the value given by the decree-holder was not unreasonable. In doing so he overlooked the fact that even though a portion of the mortgaged lands may be used for growing maize and another portion is an orchard at present, it can also be used as a building site and therefore its potential value could not be ignored. The learned Subordinate Judge is not quite correct in saying that the lands which are the subject-matter of the kebalas are situated at a long distance from the mortgaged lands. One of these lands, according to the evidence offered on behalf of the appellants, is at a distance of one bigha and another plot of land is contiguous south of the mortgaged lands.

In my opinion the conclusion arrived at by the learned Judge cannot be accepted because it has been greatly influenced by the wrong assumption that he had made in deciding this case, namely, that it was governed by Order 21, Rule 66 and not by the Money-lenders Act. I think therefore that the order of the learned Subordinate Judge should be vacated and he should be asked to estimate the value of the properties in question under Sections 13 and 14, Moneylenders Act.

I would therefore allow this appeal, set aside the order of the learned Subordinate Judge and remand the case to him for disposal according to law. The learned Subordinate Judge should proceed strictly in accordance with Section 13, Moneylenders Act, and after hearing the parties and such further evidence as they may adduce estimate the value of each property and also decide whether only some or all the properties should be sold. As provided in the decree, the property No. 2 in which the appellant is interested should be sold last of all and before that property is sold the Court should consider whether u/s 11, Money-lenders Act, such portion of the decretal amount as remains unsatisfied after the sale of the properties other than the property No. 2 shall be made payable by instalment. Costs will abide the result.

Meredith, J,

I agree.